Peugeot maker PSA announces record profits but faces trickier 2020
Coronavirus fears add to uncertainty for 2020 as PSA gears up for Fiat Chrysler merger
Peugeot maker PSA Group reported record profits last year but warned that coronavirus and a slide in European car sales have clouded the picture for 2020.
The car maker, which is preparing to merge with Fiat Chrysler in the next 12 months, saw profits rise 13.2 per cent to a record €3.2bn (£2.7bn, $3.5bn) in 2019, while revenue grew 1 per cent to €74.7bn.
Profits rose as the company slimmed purchasing costs, helping operating margins rise to 8.5 per cent, another record figure. PSA returned a dividend of €1.23 per share.
Group chairman Carlos Tavares said: “Our skilled and committed teams made the difference once again and we have achieved record results in 2019, driven by our agile, customer focused and socially responsible approach. We are ready for the energy transition and all teams are focused to offer a clean, safe and affordable mobility for customers.”
The impressive results come despite the company losing €700m in China after scaling back involvement in two joint ventures amid falling sales. The company has also suspended activity at its plants in Wuhan, the city at the centre of the ongoing coronavirus crisis.
Tavares said that coronavirus was “a big risk for the whole industry” though it was too early to predict the overall financial cost of the outbreak. PSA said it still expects to restart operations in China on March 11.
PSA’s merger with Fiat Chrysler will create the world’s fourth largest car maker, and one that both companies hope will make them better equipped for the global roll out of electric vehicles.
Peugeot’s shares leapt 5.74 per cent as markets welcomed its strong 2019 performance.
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